Are We in a Recession Yet?
It has been over six months since the Federal Open Market Committee began to cut rates to help our struggling economy. Record job losses are continuing to be recorded month after month. The housing market is continuing on a downward spiral. There has been a major slow down in consumer spending, and in the growth of the Gross Domestic Product (GDP). Even so, officials just won’t admit that our country is in a recession.
What more evidence do they need? Chances are, the economy will get better before they actually admit that we “were in” a recession. After seven months of a slowing economy, I think that it is safe to say that we are in a recession. Officials are calling it “tough times,” but I am going to go out on a limb and call it a recession. This is why I think we are in a recession now:
The financial markets are continuing to struggle, even though rates have been cut by nearly 3%.
So far this year, over 200,000 jobs have been cut.
The GDP moved at an incredibly slow pace of .6% for that last quarter of 2007.
The Consumer Price Index (CPI) is up by .3%. Inflation continues to make gas and food more expensive.
Consumer spending dropped even through the holiday season, and has not recovered.
Businesses are cutting costs in whatever way possible, and are reluctant to invest in
equipment, employees, and new ventures.
The trade value of the dollar has hit record lows against the Euro and the British pound, and hasn’t rebounded for months.
The Federal Reserve is pumping billions of dollars into the system, just to keep the credit market from totally collapsing.
The experts may not be able to see it, or admit it, but many Americans know that we are in a recession. Just ask the millions that are in foreclosure, or are in danger of it. Just ask the 7.8 million people who are unemployed right now. Ask the struggling low income families that notice that food is more expensive to buy. They will probably not hesitate to tell you that we are in a recession.
I don’t doubt that we will continue to see interest rate cuts for much of this year. Bernanke expects the economy to pull through by the very end of the year, but the near terms are not looking good to even him.
I hope that we do pull through soon.
